Last week, Senator Chris Dodd (D-CT) reintroduced legislation that would create a new modern poverty measure based on current costs of an American family’s basic necessities. This new measure would allow for a more accurate picture of poverty in America and a better understanding of the effectiveness of government programs combating poverty. Currently, poverty measurements are based almost exclusively on the 1950s cost of food and pre-tax income.

“We owe it to ourselves and our fellow citizens to effectively reduce poverty in this country,” said Dodd. “Under the old measurement, we know that more than 85,000 Connecticut kids lived in poverty in 2007, and without an updated measure we have no way of knowing how many more families are being left behind. This legislation will ensure that the resources we are providing to combat poverty are working and reaching those that need them the most.”

“We enthusiastically support Sen. Dodd’s effort to modernize poverty measurement.” said James Horan, the Executive director of the Connecticut Association for Human Services. “More accurate data is sorely needed to learn how effective federal government policies and programs, such as expansion of the Earned Income Tax Credit, are at reducing poverty. A modern poverty measure would also be useful to accurately evaluate Connecticut’s success in reducing child poverty by half by 2014, a target set by state legislation passed in 2004.”

“Poverty is one of the most daunting challenges our country faces and we need a more accurate way to measure it if we are serious about fighting it,” said New York City Mayor Michael R. Bloomberg. “Without a real understanding of our nation’s problems, it is hopeless to expect to address them. I support Senator Dodd’s legislation and applaud his leadership on the issue, which will help us to better understand the impact of our poverty policies, see the benefit of government assistance programs and make smarter decisions moving forward.”

The Measuring American Poverty Act would develop a poverty measure based on the current costs of food, clothing, shelter and other basic necessities and include the costs of certain unavoidable expenses such as medical and necessary work related expenses. The measure would also take into account government programs like the Earned Income Tax Credit, food stamps, and housing assistance. Additionally, the legislation would direct the Census to include geographic differences in the cost of living, both between states and within a state’s urban and more rural areas. In order to provide the most accurate picture of geographic variation, the bill also directs the Census to simultaneously examine the impact of state and local taxes and benefit programs on poverty.

A modern poverty measurement is supported by the U.S. Conference of Mayors, AARP, the Annie E. Casey Foundation, Half in Ten, Center for American Progress Action Fund, the Leadership Conference on Civil Rights and the Coalition on Human Needs. An updated poverty measure similar to the one described in the Measuring American Poverty Act has already been implemented in New York City.

Dodd is a senior member of the Senate Health, Education, Labor and Pensions Committee and Chairman of its Subcommittee on Children and Families.

Senator Dodd’s statement is below: Mr. President, I rise today to speak about poverty and, specifically, how we measure it and its influence on millions of Americans.

When we return from the August recess, the Census Bureau will release its annual report documenting the number of Americans living in poverty. But these numbers will provide a flawed picture of poverty in America since they are based almost exclusively on fifty-year-old food prices. The bill I am introducing today, the Measuring American Poverty, or MAP, Act, directs the Census to develop a new poverty measure that is based on a more comprehensive definition of need. Improving the poverty measure is not just an academic exercise for statisticians, it is essential in helping us identify and implement effective policies that address this crisis.

Even with an inaccurate measurement, Mr. President, the picture of poverty in America is startling. In 2007, the year for which we have the most recent data, one in eight Americans – and nearly one in five children – didn’t have the resources to meet their basic needs: food, clothing, and shelter. Think about that. One in five children in America in 2007 went to bed without even the most basic elements that we take for granted. In my home state of Connecticut, more than 85,000 kids lived in poverty. And that was before the economic downturn in which we now find ourselves. The Center for American Progress estimates that the cost to our nation of persistent child poverty is half a trillion dollars each year. Every year a child stays in poverty reduces future productivity over the course of his or her working life by nearly $12,000.

But the cost is more than just financial – it’s moral. We are judged, Hubert Humphrey famously said, by how we treat those in the shadows of life. And every child who goes to bed hungry, every American who lacks the basic necessities of life, is a mark on our national conscience. As we struggle with the great challenges of our time, the crisis of poverty is growing. More and more Americans find that shadow creeping towards them. The Center on Budget and Policy Priorities estimated that if unemployment were to rise to 9 percent--our current unemployment rate is 9.5 percent, the highest rate in 26 years-- the number of Americans in poverty would increase by as many as 10.3 million, and the number of children in poverty would rise by as many as 3.3 million.

To put those numbers in perspective, this recession will add a number of Americans equivalent to the population of Michigan to the current number who live in poverty, which is already equivalent to the population of California. In my home state of Connecticut and across this country, people who have long worked hard to get ahead are falling further behind. Folks who have worked two jobs with an eye towards sending their kids to college are having to choose between purchasing food and medications. They’re hoping that a child’s hacking cough doesn’t turn into something more serious, because they can’t afford to see a doctor. They’re staying up late staring at unpaid bills, wondering how to pay their mortgage when their only income comes from their meager savings and unemployment insurance, wondering what happened to their American Dream.

The vast majority of people who are poor do not lack the desire for a better life for themselves and their family. They are not poor in their work ethic, their love for their country and their communities. They are in poverty but they are not poor in the qualities that we so admire in America. The truth is, many are unlucky and face insurmountable hurdles. For some that hurdle is their inability to pay for higher education. For others it is that they work two jobs and can’t read to their kids at night like they want to. And far too many others are struggling to pay their mortgage and are spending all their retirement savings just to keep a roof over their heads.

As many hard-working Americans are engulfed by the shadow of poverty, we remember Hubert Humphrey’s admonition, but too often we can’t even see into those shadows, because the way we measure poverty in America is badly outdated. It is that challenge to which I today urge this body to rise.

Currently, we measure poverty by comparing two numbers: the money a family has, which the Census refers to as an “income measure,” and the money a family needs to meet its basic needs, which experts call the “poverty threshold.” If a family’s income measure is less than the threshold, they are counted as poor. It’s a simple calculation. But unfortunately both elements – the income measure and the threshold – are flawed.

The poverty threshold was created using data from the 1950s and 1960s. Currently, it’s calculated by taking the 1950s cost of emergency foodstuffs – food only for temporary use when funds are low – and multiplying that number by three, because in the 1960s, food represented one-third of a family budget. But today, food represents one-sixth or one-seventh of a family’s budget. Similarly, a family’s cash income before taxes was once an accurate and straightforward way to measure a family’s resources. But today, many Americans are subject to both state and federal income taxes and may face exorbitant health costs or other critical needs which drain their resources. In addition, many women now work outside the home, meaning they now need to pay for child care and for getting to and from work.

And, on the other side of the ledger, we now provide many benefits to low income workers that are not cash payments – they are provided through our tax code, or like energy assistance programs, paid directly to providers. I’ve fought throughout my career for programs that lift people out of poverty. Think of the Earned Income Tax Credit, the Child Tax Credit, food assistance, housing assistance, home energy assistance, child care assistance – hundreds of billions of dollars spent to help Americans that aren’t accounted for when we calculate whether our efforts are working. So, we need a new way to measure both what a family needs and what a family has.

When Mayor Bloomberg decided to tackle poverty in New York City, he started by doing what any successful businessman would – he surveyed the problem. But he discovered that our outdated system of measuring poverty simply didn’t allow him to see what was really happening. So, the Mayor charged his Center for Economic Opportunity with creating a system that would better represent that threshold, as well as a family’s resources. They followed the recommendation of the National Academy of Sciences 1995 panel described in “Measuring Poverty: An Improved Approach.” The legislation I offer today also follows these guidelines.

Specifically, this bill – the Measuring American Poverty Act – updates the calculations for both threshold and resources in the federal poverty measure. The poverty threshold would be based on the current prices of food, clothing, shelter, utilities, and a few basic household expenses. And it would revise the current measurement of income to better reflect the reality that Americans not only must pay taxes, but also certain unavoidable expenses like transportation to and from work, child care, and medical expenses. This revised measure would also include the value of near-cash benefits like energy assistance, food stamps, Section 8 housing vouchers, and tax credits such as the Earned Income Tax Credit.

Let me be very clear: this isn’t a bill to change eligibility for programs or the allocation of federal funds. In fact, the bill’s text is explicit about that. The MAP Act creates a new measurement. It does not replace the Federal Poverty Line. It does not change eligibility for programs. It will not lead to an unprecedented automatic increase in spending.

What the MAP Act will do is help us to understand the scope of the poverty crisis in America, and to better evaluate the effectiveness of our solutions to it. We have a difficult job ahead of us, as we look to lift Americans out of poverty, provide middle-class families with a strong safety net, and restore the American Dream for working men and women. But we must begin by facing unafraid the true nature and scope of the poverty crisis. I urge my colleagues to join me in support of this legislation.

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